Steve Barclay
MP for North East Cambridgeshire · Conservative · United Kingdom
“I speak to my brief exchange earlier with the Minister. As the previous speaker, the hon. Member for Harpenden and Berkhamsted, said, the draft regulations are fairly benign and very welcome to help people who are struggling with their bills.”
“The issue is not the lack of will; the issue is the alignment between procurement, regulation and clinical leadership, particularly in the colleges, as well as the ability to scale innovation—it is not about having more ministerial pilots.”
“Just to localise it to my own constituency, the Cambridgeshire and Peterborough ICB alone paid out £14 million in redundancies last year. It merged with a number of other ICBs to form the Central East ICB, yet we know hear from the Government that it should align with metro mayors, which means going back to exactly what it was before: the…”
“My right hon. Friend is absolutely right: the Government are spending millions of pounds and there is no plan. The measure was announced without working that out, it came as a surprise to many within the system, and it has had a chilling effect on many decisions. That is not isolated.”
“I rise to speak to clause 1 on the abolition of NHS England and clause 6 on promoting innovation. What characterises the first of those is an announcement without any clear plan. That is what has driven the cost and confusion that a number of Members across the House have spoken about.”
“All this is around 18 months on from the actual announcement. The confusion seems to extend to the Government themselves, because they seem unable to answer pretty straightforward written parliamentary questions. Given the time limit, I will give just a few examples.”
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“Friend speaks is shaped by things such as track and trace and the significant funding that the Treasury has put into that programme in order, as he rightly says, that we can be very targeted as we deal with this in the months ahead.”
“My right hon. Friend is absolutely right that our response to the pandemic needs to evolve as our understanding of the disease improves but also as we get a better understanding of how long we will live with the consequences of the pandemic. That is at the heart of the Chancellor’s strategy. In the initial phase in March, we locked down to protect the NHS and to build our capacity. There was a shift to the second phase in July, with the plan for jobs and more recently with the winter plan as we look to move people from being furloughed at home to being brought back into the workplace. The more tailored approach of which my right hon.”
“The Chancellor, through measures such as the extension of the loans to which my hon. Friend refers, and other cash-flow measures such as tax deferrals, is seeking to support those businesses, but we do face living with the virus for a longer period. That is why, as our approach evolves, it needs to be targeted, so that we get the balance right, not just between the health measures and the economy, but within the economy, where we need to get the balance right between wider fiscal sustainability and the support we are able to offer specific sectors.”
“The right hon. Gentleman raises an important point. The response to the pandemic is helped if across the UK we take a co-ordinated approach. For example, Scotland’s chief medical officer sits alongside the CMOs from the rest of the UK; a huge amount of joint work is undertaken through the Joint Biosecurity Centre; and I engage regularly with counterparts in the Scottish Government. The right hon. Gentleman raises the important point that there is concern in the business community and it is important that a consistent message across the UK, followed by the CMOs, is applied.”
“Earlier this year, we accepted the recommendations of the independent pay review bodies and announced a significant real-terms pay increase for around 900,000 public sector workers. However, we must ensure that all aspects of public sector pay and remuneration deliver value for money for the taxpayer. There are many recent examples of employees leaving their role and receiving six-figure packages funded by the taxpayer, and it is our view that these large exit payments do not deliver that aim, not least given the wider economic impact of coronavirus.”
“Member for Warley (John Spellar), an Opposition Member, said in the House as recently as 13 March 2020: “The hon. Gentleman is rightly drawing attention to a significant problem. Is there not another aspect to it, which is that many of these individuals, quite frankly, should not be being given any payments, because they should actually be being sacked for failure to perform their jobs? They are taking sums of money and then transferring to other parts of the public sector, where they will have a repeated pattern of failure. Is there not a need for a real change in culture”. —[ Official Report , 13 March 2020; Vol. 673, c. 622.] I am sure that view, expressed by an Opposition Member, is shared by many other colleagues in the House. Public sector workers play a vital role in the running of our economy.”
“I beg to move, That the Committee has considered the draft Restriction of Public Sector Exit Payments Regulations 2020. It is a pleasure to serve under your chairmanship, Sir Christopher. I know that you have a long-standing interest in the topic of the draft regulations, and I am pleased that you will oversee the debate. Each year, hundreds of millions of pounds are spent on exit payments to public sector workers that exceed £100,000. The money funding these payments comes from taxpayers. The draft instrument will fulfil the Government’s 2015 manifesto commitment to end six-figure pay-offs by capping public sector exit payments at £95,000. The concern over high exit payments is shared by many across the House. For example, the right hon.”
“The level of the cap amounts to almost six times the maximum statutory redundancy payment. On an average salary of £24,897, the average person would have to work almost four years to earn £95,000, while someone working 35 hours a week on the national living wage would have to work around six years to earn £95,000—and that ignores the fact that the first £30,000 is paid tax-free. As such, it is clear that a £95,000 cap will still offer a significant level of compensation while ensuring value for money for the public finances. In fact, I think that the majority of our constituents would regard it as a generous amount.”
“I will come on to the distinction between those on large payments, where I think there is a degree of consensus in the House, and how the waivers will address some of the concerns that the hon. Gentleman and other Opposition Members expressed in the previous debate on this issue. I will come on to that if he gives me a moment, and if he then wants to come back with an intervention, I will be very happy to accept it. Exit payments are important to an employer’s ability to reform and to react to new circumstances. They are also an important source of support for individuals as they find new employment or as a bridge to retirement age. That is why the Government are taking forward these important regulations to cap public sector exit payments at £95,000.”
“The Government’s intention to cap exit payments has now been in the public domain for more than five years, providing public sector bodies and employees with sufficient time to communicate their views, including through the consultation process, and to prepare for the implementation of the cap.”
“Prioritising in this way will ensure most exit payments in the public sector are limited to £95,000 without further delay, while work continues on expanding the scope of the regulations.” To ensure fairness and consistency and to give taxpayers confidence that their money is being spent properly, it is right that all public sector bodies are immediately in scope, with limited exceptions, such as the one I just referred to. The consultation in 2019 proposed capturing public sector bodies in two stages. Many of the responses objected to that proposal. We have therefore revised the proposal and reverted to applying the cap to all public sector bodies at once.”
“and hon. Friends for their representations during the development of the policies. The Government’s intention was made clear at the start, which was to apply the cap to all public sector workers. As the 2015 consultation stated, it would apply to “all bodies classified within central and local government and non-financial public corporation sectors as determined by the Office for National Statistics for National Account purposes, with a small number of exceptions.” The 2019 consultation stated: “The government is proposing a staged process of implementation across the public sector. The first stage will capture most public sector employees, before extending the cap to the rest of the public sector in the second stage.”
“I very much welcome that intervention, because that concern was raised by a number of Opposition Members when we debated this issue in the House previously. We have agreed a waiver that will apply to nuclear decommissioning as part of the draft regulations. I will come on to the wider point about how the waiver will apply, but the exemption that applies to nuclear decommissioning illustrates that we have taken on board some of the concerns that Opposition Members have raised. I am grateful to all members of the public, employers, unions and others who submitted their views as part of the consultation process. The consultation in April 2019 received more than 600 responses, which helped inform the final regulations following the earlier consultation in 2015, which had more than 4,000 responses. I am also grateful to many of my right hon.”
“The option of an employer-funded early retirement, known as pension top-up payments, is often the most costly element of an exit payment. It is ultimately funded by the taxpayer, so it is right that it is included.”
“It depends on different circumstances as to how many people will be affected. A key issue is that the proposals do not affect individuals’ accrued pension rights. A concern was raised in the previous debate about the impact on pension rights. Again, that is one of the issues we have listened to and taken on board. It is important to note that accrued pension rights are not affected by the regulations. In the vast majority of cases, the cap will have no effect on the exit package of an individual, because individuals retain any right to receive an unreduced pension, provided their overall exit payment falls below the cap of £95,000, which applies in most cases. However, the Government believe it is right to include all payments related to exit within the scope of the cap.”
“I agree with the hon. Gentleman. I took that point away from the previous debate and was concerned to show the House that we had listened. In fact, it echoes the next line of my speech: I do accept that in some circumstances it will be appropriate for employees to receive an exit payment of more than £95,000.”
“I am always generous in taking interventions. I was trying to answer the hon. Gentleman’s legitimate challenge, but I will of course take the hon. Lady’s intervention.”
“I am very happy to share with the hon. Lady the detail of that waiver as it relates to the pensions of Nuclear Decommissioning Authority workers. The waiver will apply in respect of the Nuclear Decommissioning Authority. That includes—”
“Member for Newcastle upon Tyne North, who has not as yet spoken, said in the previous debate that she accepted the wider principle of exit payment caps, but had some concerns. We have sought to look at, and listen to, the concerns that Opposition Members have raised. I accept that there are some circumstances in which it is appropriate for employees to receive an exit payment over £95,000, including where imposing the cap would cause genuine hardship. We are committed to ending taxpayer-funded six-figure payouts for the best-paid public sector workers, but it is appropriate that the waiver system can be exercised with ministerial discretion if it is felt that implementing the cap would go against the original principles and result in hardship.”
“If the hon. Lady will allow me to answer the question, I was going to read out the exact legal prose. Sometimes we are accused of not being precise enough, so I was going to go straight to the legal text for her. It says: “made to or on behalf of an employee…who is employed…by a company or other body holding a site licence granted under the Nuclear Installations Act 1965 for one or more nuclear-licenced sites…and on a site that is subject of a decommissioning programme agreed between the NDA and the BEIS Secretary of State, and…whose employment is terminated”— details follow accordingly. So there is an exemption there. I will come back to the point made by the hon. Member for Bermondsey and Old Southwark. In fact, the hon.”
“Let me just finish the point. The waiver may also be used to give effect to urgent workplace reforms. It applies where a payment is made as a result of the application of TUPE regulations, or where the payment is made to settle a grievance related to whistleblowing, discrimination, or health and safety-related dismissal. This mechanism is very important in allowing us to review how the cap is being applied and to ensure that we remain consistent with our original aims for the regulations. I hope that this system will address many of the questions that hon. Members have. Does the hon. Gentleman want to come in one final time?”
“That is a very valid question. In a whistleblower case, for example, there is no requirement on the local authority to submit a business case for approval. There are mandatory causes for exemption. However, where a discretionary exemption is sought, such as on a restructuring, it is necessary to submit a business case. [Official Report, 2 November 2020, Vol. 683, c. 1MC.]”
“Ensuring that rewards are proportionate and taxpayer money is spent fairly must be prioritised. The regulations are carefully designed to end excessive exit payments, and will come into force 21 days after they are made. I commend them to the Committee.”
“The hon. Gentleman shakes his head, but I simply remind him that as a Minister, I constantly get requests when bodies want to exceed the £150,000 payment. They are quite happy to submit business requests for that, so I do not see why it is onerous to say that the same applies to seeking consent when looking to restructure, and to exempt in that way. In other parts of the United Kingdom, devolved Administrations have already acted to implement their own policy on severance payments. The Scottish Government have implemented a £95,000 cap on payments made by devolved bodies by updating the Scottish public finance manual. It is right that this Parliament does the same by approving these regulations. As we respond to the financial impacts of covid-19, the inappropriateness of large exit payments is reinforced.”
“In short, the Nuclear Decommissioning Authority has a waiver, but the organisation is classified by the ONS, which is why it is within the scope of the cap—that is the interaction between the two. The hon. Member for Ilford North started by generously acknowledging that we have listened and addressed some issues of concern. There are some areas of misunderstanding: an equalities impact assessment was issued with the primary legislation. He then said that on the one hand, we do not need the regulations, but that on the other, he was against excessive payments. I would argue that the whole purpose of the regulations is to curb the excessive payments that he, I and a number of colleagues across the House agree are not value for money. The hon. Member for Bermondsey and Old Southwark—”
“As we have set out many times—most recently by ensuring that the cap covers all of the public sector at once—the cap should apply to all public sector organisations with very limited exemptions. The defining feature of that is what is set by the Office for National Statistics. We are able to exercise our own judgment, but for the most part, the scope has been guided by the ONS, which makes objective judgments, independent of Government and the regulations. The ONS classification is what means that the Nuclear Decommissioning Authority and its site-licensed companies are in the scope of the regulations, but we have a mechanism to waive certain pension-related payments upon redundancy, and that is what has been decided—I read that out for the benefit of the hon. Lady.”
“I thank colleagues for their engagement in the debate. As I have already remarked, the Government are strongly of the view that the regulations are important in delivering value for money. It is right that the cap on public sector exit payments comes into force without further delay to stop the excessive payouts that are, unfortunately, all too common. The hon. Member for North Ayrshire and Arran asked me to clarify the position on nuclear decommissioning, which has been a much-debated issue. Indeed, there was extensive debate during the passage of the primary legislation about the inclusion of nuclear decommissioning workers in the scope of the regulations.”
“The reality, without wanting to stray into the issue of litigation, is that this is a cap on payments, so a body representing members may have concerns about that. The issue before the Committee is what constitutes value for money for the taxpayer. I remind the Committee of the fact that payments can be more than six times the national living wage and four times the average earnings. During the time of coronavirus, those are very substantial payments. You will be familiar with, Sir Christopher, some of the payments that were read out on the Floor of the House—those of NHS managers for example, who receive very large payments and then reappear elsewhere in the NHS very shortly.”
“The Government accept that there might be instances where it is in the interests of urgent workplace reform to relax the restriction imposed by the regulations, so there is flexibility within the system. Finally, the hon. Member for Ilford North raised the issue of index-linking. The point is that we want to retain the flexibility to revalue the cap both upwards but also downwards. If one looks at the economic consequences of coronavirus, ensuring that there is flexibility in the system is a prudent way to manage the public finances.”
“As someone who worked with Sir Mark, particularly in my role as Secretary of State for Exiting the European Union, I place on the record what a fine public servant he was and how much I valued working with him during his time in office. The hon. Member for Bermondsey and Old Southwark, who made a number of interventions—I hope that comment is not untoward—also raised a legitimate point about local authorities. As I say, it is something I looked at in particular. Local authorities’ ability to restructure should not be dependent on six-figure taxpayer-funded payouts. Councils will still be able to restructure and exit staff in any way they wish, provided the sum of any exit payment does not exceed £95,000.”
“I was going to come to local authorities, but to address the issue of senior civil servants, that flowed from the decision to split the role of the Cabinet Secretary and the head of the civil service with that of Sir Mark’s other role as National Security Adviser, which meant that he was stepping down before the end of his tenure. It was therefore appropriate that Sir Mark was compensated in line with the civil service compensation scheme, and the sum is in line with the normal rules governing civil service pensions and compensation. Since 2015, in anticipation of the introduction of a cross-public sector cap on exit payments, any civil service exit costing more than £95,000 requires approval by Cabinet Office Ministers to ensure that it provides value for money to the taxpayer.”
“I acknowledged earlier that in a previous speech the hon. Lady accepted the principle of capping excessive payments, but raised concerns to which I listened intently. I join with her in paying tribute to the work that so many have done across the public sector, but at the same time it is important to get value for money. For that reason, I commend the regulations to the Committee. Question put.”
“As of 16 August, 9.6 million jobs have been protected by the coronavirus job retention scheme, helping 1.2 million businesses with a total value of £35.4 billion.”
“The £2 billion kickstart scheme has the potential to support more than 250,000 young people and, as my hon. Friend is well aware, it is part of a comprehensive package of £30 billion of support that my right hon. Friend the Chancellor set out as part of his plan for jobs in the summer economic update.”
“The hon. Lady is simply wrong. What she ignores is the fact that my right hon. Friend has put in place a furlough bonus as support that goes beyond October to retain that link for employees to come back. That is part of a wider package of measures that goes alongside the furlough and stands comparison with the most generous in the world.”
“There seems to be some confusion because, just last week in a debate in this House, the shadow Chancellor actually recognised that the Chancellor had indeed listened with regard to the design of the furlough. In fact, Labour claimed credit for the role, which I salute, of the trade unions and others. So we have listened, but the reality is that the furlough pays a higher rate of people’s wages than the scheme in Spain. It supports a wider range of businesses than the one in New Zealand, and runs for twice as long as the one in Denmark. That shows my right hon. Friend’s flexibility and willingness to listen.”
“The Government have put in place a £190 billion plan to protect people’s jobs, incomes and businesses, one of the largest and most comprehensive economic responses in the world, and that includes the £30 billion made available under the plan for jobs.”
“My hon. Friend is right to recognise the effectiveness of that scheme in supporting demand. It was dismissed as a gimmick when my right hon. Friend the Chancellor launched it, but it has been warmly received by the hospitality industry. As she knows from her constituency and that of others, it is part of that wider package of support, including the cutting of the rate of VAT, which again has been a huge boost to that industry.”
“I pay tribute to my right hon. Friend for that event. I saw the read-out, and how positive it had been. He is right to focus on that forward piece, using the package of measures that my right hon. Friend set out. That includes, for example, the payment to employers for each new apprenticeship—up to £2,000 for those over 25—and the £2 billion kickstart scheme, but also other schemes such as the tripling in the number of traineeships. Events such as the one he mentioned are ones that I am sure other Members will wish to follow.”
“Yes, Her Majesty’s Treasury is responsible for the allocation of ODA across all Government Departments. The comprehensive spending review will determine all ODA budgets.”
“I know my hon. Friend takes a close and expert interest in this issue, not least through her work on the relevant Select Committee. Individual Departments are responsible for ensuring that all money spent as ODA meets the criteria of the OECD Development Assistance Committee, and that it is spent through the powers of the International Development Act 2002, which requires funding to be likely to contribute to a reduction in poverty.”
“The Government are committed to all groups in society, including the most vulnerable, facing the challenges caused by covid-19. That is why we have put in place an unprecedented package of support, including the job retention scheme, the self-employed income support scheme, and a package of welfare measures that the Office for Budget Responsibility estimates to be worth in excess of £9 billion.”
“My right hon. Friend is a passionate champion of this issue. He will have noted from the answer given earlier by my right hon. Friend the Chancellor that the distribution analysis at the time of the summer update illustrated that the measures taken by the Chancellor had protected the poorest households the most, as a proportion of income. I know that he will have listened closely to my right hon. Friend’s representations.”
“The hon. Gentleman is right to highlight the importance of levelling up across the United Kingdom. It is a key objective of this Government. That is why we are backing councils with the resources they need to meet the challenges caused by coronavirus. That includes more than £3.7 billion of grant funding so far, to address many of the pressures that they face.”
“Spending on devolved matters is a matter for the Welsh Government. The UK Government do not set the levels of pay for care workers in England, but we are focused on ensuring that the social care system is funded, so that providers pay a fair wage.”
“The hon. Lady should point out to those same workers that this Government have allocated an unprecedented £4 billion of guaranteed funding to the Welsh Government to enable them to allocate funds in accordance with what is a devolved matter. If she is drawing attention to a shortfall in what she feels should be going to care workers in her constituency, she needs to address why more of that £4 billion is not being allocated to care workers in what is a devolved arrangement.”
“My hon. Friend is right to draw attention to the particular impact on that sector. We are engaging closely with the sector, and I am very happy to continue to engage in dialogue with my hon. Friend on the issue.”
“I think my right hon. Friend addressed this in his reply to the shadow Chancellor. The key issue is the package of measures that the Government are putting in place. First and foremost among those is retaining people’s link to employment. That is the most important issue. Alongside that, the measures on welfare, including support for businesses that are in lockdown, are part of the comprehensive response, and statutory sick pay is one of a suite of measures.”
“My hon. Friend is absolutely right. That is the underlying principle behind furlough—to enable the labour market to bounce back, with jobs in businesses that were viable before the pandemic being able to recover quickly. It is also part of the three-phase strategy that my right hon. Friend the Chancellor has set out. The second phase is to concentrate on skills to create jobs, protect jobs and support jobs, and to enable those workers to come back into the economy and for the economy therefore to recover more quickly.”
“Our economic response is moving through a careful, co-ordinated plan, in three phases: first, the immediate response, which started with the Budget in March; secondly, the specific plan for jobs announced in July, to protect, create and support jobs; and thirdly, rebuilding, on which we will say more in the autumn Budget and the comprehensive spending review. Let me take this opportunity to thank the many people—including Members from all parties—businesses and other organisations that have brought forward ideas and suggestions to help us to shape that plan.”